Creation and Modification of the Employment Relationship

• Author: Geoffrey England
• Pages: 31-48

31

CHA PTER 3

CREATION AND

MODIFICATION OF

THE EMPLOYMENT

R EL AT IONSHIP

This chapter examines the law governing t he formation and modi f‌ica-

tion of the employment contract.1

First, we analyze who has the “legal capacity” to enter into an em-

ployment contract. We shall see th at there are restrictions at common

law and under legislat ion on the employment of ment al incompetents

and children. As well, speci al legislation sets minimum qualif‌ications

for employment in def‌ined trades, professions, a nd occupations (e.g.,

nursing and electrical maintenance); immigration laws restrict em-

ployment by non-Canadians; and apprenticeship legislation restricts

the conditions under which persons can be engaged as apprentices in

designated trades and professions.

Second, we examine legislated restr ictions on how employers con-

duct recruitment. Here, we analyze the operation of the general prin-

ciples of contract formation and modif‌ication in the context of the

employment relationship, namely,

• offerandacceptance,includingtheStatute of Frauds;

• therequirementofcertaint yandthesourcesofcontractualter ms;

• enforcement ofrepre sentations by means of the tort s of negligent

and fraudulent misstatement;

1 For further det ailed elaboration on this topic , see G. England, R. Wood, & I.

Christie, Employ ment Law in Canada, 4th ed ., looseleaf (Markham, ON: Lex is-

Nexis Can ada, 2005–) c. 7.

INDIVIDUAL EMPLOYMEN T LAW32

• theapplication ofthe doctrine ofconsideration tothe creation and

modif‌ication of the contract; and

• factorsth atwillv itiateanemployment contract,suchas misrepre-

sentation; mist ake; duress, unconscionability, and undue inf‌luence;

and supervening illegality.

Third, we outline the prohibitions against discriminatory hiring

contained in human rights and collective bargaining legislation, the

statutory restr ictions on the activ ities of private employment agencies,

and the statutory prohibitions in Manitoba against conducting personal

investigations of job applicants.

A. LEGAL C APACITY TO ENTER INTO AN

EMPLOYMENT CONTRACT

Any person recogni zed as having legal capacity according to the regu-

lar laws of t he land i s el igible to enter into an employment contract,

subject to the statutory limitations reviewed below.

At common law, the term “legal capacity” means that a person must

have suff‌icient mental competency to understand the legal signif‌ica nce

of his or her actions. Lack of mental capacity renders the employment

contract voidable at the option of the incapacitated part y.2 In addit ion,

if an individual’s mental incapacity results in being declared incompe-

tent under provincial incompetent persons legi slation, that individual

cannot become or remain a part y to an employment contract on his

or her own beha lf, but must act through a guardian.3 Of course, in

deciding whether or not to hire or f‌ire an employee who is mentally

incompetent, employers must be mindful that such incompetency con-

stitutes a protected “disability” under the human rights legi slation in

all jurisd ictions.4 The latter legislation prohibits the employer from re-

fusing to hire a person by rea son of mental competence unless the em-

ployer can show that the person will be unable to perform the job, and

the employer has tried to accommodate the employee up to the point of

causing the f‌irm a n “undue hardship.”

At common law, an “infant” — def‌ined a s a person below the age

of eighteen — is eligible to enter into an employment contract, but it

will only be legally binding during infancy if the contract as a whole

2 Hardman v. Falk (1955), 15 W.W.R. (N.S.) 337 (B.C.C.A.).

3 Examples.: Alb erta Dependant Ad ults Act, R.S.A. 2000, c. D-11; Ontario Mental

Incompetenc y Act, R.S.O. 1990, c. M.9.

4 See Chapter 7.